COCHIN SHIPYARD LTD Vs. APEEJAY SHIPPING LTD

JUDGEMENT

(1.) In this Appeal, by special leave, the appellant calls in question the legal tenability of the order passed by the learned single Judge of the High Court of Kerala in O.P. (C) No. 482 of 2013 whereby he has granted liberty to the respondent to substantiate its objection preferred under Sections 30 and 33 of the Arbitration Act, 1940 (for brevity, "the 1940 Act") by adducing evidence which would be considered within the ambit and scope of the aforesaid provisions.

(2.) The facts which are essential to be stated for the adjudication of this appeal are that an agreement was entered into between the parties on 29.11.1980. As per the terms and conditions of the agreement, the appellant, a Government undertaking, had agreed to build and deliver a cargo ship to the respondent for the price of Rs. 32.527 crores. Certain differences arose between the parties which led to an arbitration proceeding and a former Judge of this Court was appointed as the arbitrator/sole umpire to resolve the disputes between the parties. As facts would unveil, the learned arbitrator after holding series of sittings passed an award on 15.07.2009. After the award was sent to the civil court, the claimant-appellant moved the Court for passing a decree under Section 17 of the 1940 Act in terms of the award and the respondent filed O.P. (Arb.) No. 30 of 2009 under Sections 30 and 33 to set aside the award. During the pendency of the said petition, the respondent almost after expiry of two years filed an application, that is, I.A. No. 5625 of 2011 seeking permission to examine the learned arbitrator and the General Manager of the respondent as witnesses. The learned Additional Subordinate Judge, vide order dated 23.12.2011, rejected the application holding that there was no justification to examine the arbitrator; that the Court while considering the objections under Sections 30 and 33 of the 1940 Act does not sit in appeal over the arbitrator's award; that the Court does not assess or re-appreciate the evidence; that the award passed by the learned arbitrator can only be assailed on the grounds as engrafted under Sections 30 and 33 of the 1940 Act; and that no reason had been disclosed by the respondent, the applicant before the Subordinate Judge, to examine the witness No. 2, that is, the General Manager.

(3.) The aforesaid rejection of the application constrained the respondent to file a Writ Petition before the High Court which concurred with the view expressed by the court below opining that there was no necessity to examine the arbitrator as a witness as more than five years had elapsed since the award was passed. The High Court further appreciated the reasoning expressed by the rule making Court and ruled that even if umpire would be examined, no fruitful purpose will be served and, accordingly, gave the stamp of approval to the same. However, the High Court granted liberty to the writ petitioner to produce other available evidence to substantiate its claim and specifically permitted to examine its employee as a witness in the proceeding. The High Court further observed that his evidence would be appreciated bearing in mind the scope of Sections 30 and 33 of the 1940 Act and, accordingly, modified the order passed by the civil court. Be it noted, further liberty was granted to summon the entire record including the orders passed in the course of the arbitral proceeding.